Can one spouse file bankruptcy is a common question asked of bankruptcy attorneys in Dayton, OH. It is possible to for a spouse to file bankruptcy without the other, however, filing for bankruptcy is an important decision that will affect the entire family so it’s important to consult your spouse as well as a Bankruptcy attorney in Dayton to ensure it’s the right move for you and your financial affairs.
Filing Bankruptcy without Your Spouse
When filing bankruptcy without your spouse, how their property is affected depends on if you live in a common law or community property state. If you are unsure if you live in a community property state, there are nine and include: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Unless you live in any of these states, common law applies which means that property with your name on the title is yours, and property in both you and your spouse’s name is owned jointly. When you file for Chapter 7 bankruptcy, you list all the property you own, which is said to be placed into a “bankruptcy estate”. Under Ohio Bankruptcy Code, any property that can’t be excluded from the bankruptcy estate using exemptions will be sold by the Bankruptcy Trustee to satisfy your debts.
Jointly Owned Property in Bankruptcy
If the portion of property you own jointly isn’t exempt, the bankruptcy trustee can still force the sale of the property if they can’t sell your share solely or if it isn’t possible. The burden of proof lies on the trustee to show that the benefit of selling the property outweighs the loss to the co-owners.
How to File Bankruptcy Individually
Making the decision to file jointly or separately depends on the type of debt you are attempting to discharge. If one spouse files separately, then the other is still legally obligated to pay back their individual debts. It’s usually a better decision to file together if you own a large amount of joint debt. Additionally, you want to consider how much property you own and how much can be exempted in an Ohio bankruptcy. Contact a bankruptcy lawyer in Dayton to find out how bankruptcy protection can affect your financial outlook, as well as, your partner’s, and if bankruptcy is the correct debt relief strategy for you.